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The Swiss National Bank (SNB) has been stealthly investing internationally with it's foreign currency holdings at the end of September worth SFr760bn. A fifth of the foreign currencies are invested in equities throughout Europe, the US and emerging economies. $88 billion in U.S. stocks alone. The SNB total holdings of US stocks are now at an all time high $87.8 billion, up 4.2% or $3.5 billion and from the $84.3 billion at the end of the second quarter.

For all intents and purposes it is a sovereign wealth fund  like Norway’s $1000bn oil fund,, though the SNB says it is not.

Its investment in equities are massive for example its top there investments in the US include  just under $3.0 billion in Apple followed by around $2.0 billion in both Alphabet and Microsoft. It's holdings in Facebook, Amazon, Johnson and Johnson and Exxon are all worth over $1 billion.

 

SNB Top Ten Equity Holdings at Q32017

Apple
Alphabet Class A & C
Microsoft
Facebook
Amazon Johnson & Johnson
Exxon Mobil
AT & T
Proctor & Gamble
Pfizer

 

What Holding Does The SNB Have in U.S. Companies?

The SEC requires the disclosure of holding via filing a Form 13F. Below is the SNB's form. Read through and see how you compare with your investments.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 13F Swiss National Bank OMB 3235-006

Details are not revealed other than in the US where Securities and Exchange Commission rules require the SNB to disclose its holdings. There is the obvious question now as we see the BOJ owning over 60% of Japanese ETF's (some say over 80%). How manipulated are the world's equity markets and should citizens of these countries be exposed to such risk?

Interim results of the Swiss National Bank  as at 30 September 2017

The Swiss National Bank (SNB) reports a profit of CHF 33.7 billion for the first three  quarters of 2017. A valuation gain of CHF 2.3 billion was recorded on gold holdings. The profit on foreign  currency positions amounted to CHF 30.3 billion, and the profit on Swiss franc positions to CHF 1.5 billion. The SNB’s financial result depends largely on developments in the gold, foreign exchange  and capital markets. Strong fluctuations are therefore to be expected, and only provisional  conclusions are possible as regards the annual result.

Profit on foreign currency positions The net result on foreign currency positions amounted to CHF 30.3 billion. Interest income accounted for CHF 6.8 billion and dividends for CHF 2.5 billion. Movements in bond prices differed from those in share prices. A loss of CHF 4.0 billion was recorded on interest-bearing paper and instruments. By contrast, equity securities and instruments benefited from the favourable stock market environment and contributed CHF 14.4 billion to the net result. Overall, exchange rate-related gains amounted to CHF 10.5 billion

SNB Investment Performance

How big is the potential domination of individual companies. Lets look at Apple $AAPL; the SNB's holdings increased to 19.2 million shares in Q3. It now a larger holder of Apple stock than Schwab with 18.3 million shares and Franklin Resources with 17.0 million shares. Janus has 20 million shares. The relentless march upwards of U.S. stocks, in particular the high risk Nasdaq has befuddled seasoned investors. Not hard to see how with central banks, printing money (that is out of no where) and using said monies to buy stocks in bulk.

We Aint No Sovereign Wealth Fund

Andréa Maechler, governing board member, told the Financial Times back in June 2016  "We consider ourselves first and foremost a central bank,”. “Our balance sheet expansion is the direct reflection of our monetary policy actions. That is the key point which differentiates us from a sovereign wealth fund.” If that risk would require us to take a position against the Swiss franc, which would go exactly against our monetary policy”. “How do we deal with that?

"The key risk management tool we have is diversification so that if anything happens in one currency, in one instrument, you have counter pressures through a well-balanced and well-diversified portfolio.” Ms Maechler added .“the general concept we have is that we take our role as a large investor seriously,  we exercise our shareholder rights as long as they don’t draw us into political debates.” “In grey areas, we just abstain,” “We don’t want to be part of political discussions. We try to go as far as possible without creating a risk from a monetary policy perspective.”

The Financial Times in a piece on the SNB said the need for diversification, as well as a desire to boost overall performance, explains why the central bank has pushed increasingly into equities, a move made possible by a change in Swiss law in 2004. In its annual report for 2015, the SNB revealed it held shares of about 1,500 mid and large-sized companies and roughly 4,400 smaller companies in advanced economies, and about 800 emerging economy companies.

Appendix 1 Publications and other resources 2 SNB balance sheet 3 Addresses 52 The Swiss National Bank in Brief

Sources:

From The TradersCommunity Research Desk

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